Blockchain technology is not just used for bitcoin and other cryptocurrencies. It has a wide range of uses in various fields like insurance and health. The unique features of blockchain can benefit insurers in a number of ways, including cost savings, increased revenue, improved customer service, and more. Blockchain has had transformational advantages for insurance firms. The pandemic has suddenly made insurance the centre of attention. But to argue that insurance hasn’t been a pioneer up to this point would be misleading. In fact, a variety of insurance products have generated enormous income in the US and elsewhere in the world. The new era has brought about a decline in the attractiveness of the insurance industry due to fraudulent activities. Blockchain has had a significant impact on such fraudulent scenarios in the insurance business. The way insurance firms conduct business could change because to technology. It can increase transparency, follow rules, and create top-notch goods and markets. In this post we collect the 7 amazing blockchain use in the Insurance .
List of amazing blockchain use in the Insurance
- Fraud Protection
- Customer Interaction
- Claims Administration
- Medical Insurance
- Vehicle Insurance
- Emerging Markets Micro-insurance
Details for blockchain for insurance use cases
Families may incur additional premium charges of $400 to $700 annually as a result of insurance fraud. Expert estimates place the annual cost of non-health insurance fraud in the US at at $40 billion, according to an FBI report. Insurance fraud of this nature can be wiped out by insurers using blockchain insurance claims.
The immutability property of blockchain makes it possible to shift insurance claims into a shared ledger among insurance companies that cannot be altered, which can eventually lower fraud. Additionally, blockchain makes collaboration between insurers much simpler. Insurers can quickly determine whether a certain claim has been paid when they have access to the same shared blockchain ledger. They use the same previous claim data, so they can instantly spot questionable conduct.
Currently, a lot of insurers use data from private companies and data that is available to the public to spot fraud. Due to legal restrictions on disclosing personally identifiable information about individuals, such data sets have the drawback of being incomplete.
Due to customers reluctance to submit sensitive information to insurance agents, insurance providers face numerous difficulties when gathering data. It makes sense because they are concerned about keeping their private information secure.
These possibilities can now be facilitated via blockchain. How?
Greater protection and control over personal data are ensured. Customers can securely communicate their private and sensitive information with this specialised technology.
Customers of Know Your Customer (KYC) data services can readily share identification information on a smart contract basis, and data requests from these services are simple. Additionally, it would be simple to reuse it in other businesses for safer verification.
Property and casualty (P&C) insurance efficiency can be significantly increased when insurance policies are posted on a blockchain as smart contracts. It can also save insurers over $200 billion in operating expenses each year.
To further comprehend the scenario, let’s use the example of auto insurance. Imagine if you were at fault for an automobile accident that you were in. Naturally, you file a claim with your insurance provider to get your loss covered. As a result of the request, your insurance provider will begin looking into the claim and attempting to collect money from the insurance provider for the other motorist.
A blockchain’s smart contracts for insurance policies can automate information transfers between insurers and other parties by executing preprogrammed claims processing activities. delivering payments to policyholders smoothly is another benefit. Now that everyone would have access to the same information, disagreements would be much less likely.
Wouldn’t it be great to have clients pay less and have their health insurance claims processed more quickly? This is feasible because to blockchain. The technology can make it possible for healthcare providers and insurers to share medical data quickly, accurately, and securely. Health insurance claim processing may become time-consuming and expensive due to privacy laws when hospitals and health insurance companies share patient data. In fact, a lack of information may result in a claim being denied.
Healthcare providers and insurers can access a patient’s medical data without compromising patient confidentiality when encrypted patient records are stored on a blockchain. The industry might save billions of dollars a year thanks to the synchronized patient data database. Additionally, because the blockchain may hold cryptographic signatures for each medical record, patient privacy is ensured.
Without generating an audit trail, it would be difficult to change a patient’s medical records that are kept on a blockchain.
Vehicle insurance is another another industry where technology may raise rewards to a new level. Reexamining the vehicle accident example, blockchain enables both parties to obtain the necessary data. Now, a client may anticipate receiving an immediate refund, and the insurer can watch the car being fixed by an authorized mechanic.
It can become complicated when insurers and reinsurance companies share data. It takes a lot of time and requires repeated manual labour. Blockchain allows for the streamlining of processes and information flows, which is advantageous for both reinsurers and insurers.
Insurance is provided to insurance firms by reinsurers. As a result, when several claims come in at once, insurance companies won’t go bankrupt. For instance, during hurricanes or earthquakes.
Emerging Markets Micro-insurance
The administrative procedures that require a lot of human labour and the hefty costs for little payments can often make microinsurance schemes appear to be unprofitable.
Blockchain, however, enables emerging market microinsurance programmes to automate underwriting and claims administration based on predefined rules. Now, payments to insured farmers can be made with ease.
Today, blockchain technology can revolutionise the insurance industry. Blockchain has many appealing applications, and it has the potential to revolutionise the digital management, tracking, and insurance of physical assets.